Which of the Following Statements Regarding P/E Ratios Is True

question 46

Multiple Choice

Which of the following statements regarding P/E ratios is true?

• A)Generally,the riskier the stock,the higher the P/E ratio.
• B)In recent years,the small capitalization stocks had the highest P/E ratios.
• C)As interest rates increase,P/E ratios are expected to decline.
• D)Higher growth prospects often lead to lower P/E ratios.

---

Definitions:

Transitions

Changes or movements from one state, stage, subject, or place to another, often used in writing, speech, or film.

Professional

Pertains to or is characteristic of a profession.

Subheading

A title or heading of a subsection in a piece of writing, used to organize and break down content into more digestible segments.

Major Section

A significant or primary division within a document, presentation, or work, that groups related content or ideas together.